Antonio Manresa

A general equilibrium analysis of the 1986 tax reform in Spain

Spain’s recent entry into the European Economic Community (EEC) has been accompanied by a number of economic reforms needed to comply with requirements imposed on a11 member countries. A key ingredient of these reforms has been the introduction on I January 1986 of a vaiue-added tax (VAT) on consumption as a substitute for a complex range of indirect taxes, including a turnover tax applied at every stage of the production process. The fiscal reform has posed a number of interesting policy questions. For instance, one common criticism of the new tax system is that its rates have been chosen too high and will further depress the economy, whose oflicial unemployment rate was 22% in 1985. Government officials are very concerned, however, with the effect of the new tax system on public revenues and, in turn, on the substantial deficit of the public sector, which was 8% of GDP in 1985. Another current debate centers on whether the new tax system has a detrimental impact on the capital-labor ratio due to the retention of social security taxes, which are taxes on the use of labor. In this paper we use an applied general equilibrium model of the Spanish economy to analyze the impacts of the indirect tax reform on relative prices, resource allocation, and income distribution, using the information contained in the social accounting matrix constructed by Kehoe et al. (1985). In the next section we describe the model, placing emphasis on its novel features. In

Energy intensities and CO2 emissions in Catalonia: a SAM analysis

In this paper, we estimate sectoral energy intensities and CO2 emissions for the Catalonian economy. In order to evaluate energy intensities, we use the SAM (Social Accounting Matrix) multiplier analysis applied to a SAM of the economy. CO2 emissions are estimated by means of the Leontief input-output submodel of the SAM, together with a table of coefficients of emissions per unit of monetary expenditures. This new methodology allows us to dispense with energy input-output tables for the base period. Our results are of the same order of magnitude as others obtained by physical measurement methods. We also simulate how changes in demand and energy energy efficiency parameters may affect CO2 emissions for the economy.

Measuring Commodities' Commodity Content

Within the standard linear framework, a methodology, formally similar to the labour theory of value, is proposed to compute the direct and indirect commodity contents of any produced good. The proposal is then compared with the more familiar social accounting matrix (SAM) accounting procedure, using an appropriate partitioning of the SAM accounts. Some numerical results are then obtained and compared using a recently compiled SAM for Catalonia. The empirical results show the practical feasibility of the proposed methodology.

The general equilibrium effects of social security contributions under alternative incidence assumptions

This study deals with the economic effects of a firms social security taxes in the Catalan economy, using an applied general equilibrium model. A novel aspect of the analysis is that it hypothesizes about the incidence of firms contributions on both employers and employees. The results of a reduction in firms social security taxation are sensitive to the incidence assumption. In particular, the study shows that the effects on regional unemployment, income distribution and relative prices of factors depend considerably on the incidence hypothesis assumed.

Removal of farm subsidies in a regional economy: a computable general equilibrium analysis

The purpose of this article is to analyse the importance of farm subsidies for the Extremadura economy. To this end, a computable general equilibrium model for this region is presented, with which we analyse the economic effects caused by a simulated removal of these subsidies. Different scenarios involving the labour market rigidities and tax compensation are considered. Model parameters are determined by the procedure known as calibration, using a social accounting matrix constructed for this economy. The results clearly show the negative effects that this elimination would produce on the main micro and macroeconomic variables.

Growing Through Trade: The Role of Foreign Growth and Domestic Tariffs

This paper studies the role of trading partner’ growth and a domestic import tariff in the possibility of growing through trade. To this purpose, a Ricardian model is developed in which a backward economy seeks to increase its long-run growth rate simply by trading with a faster growing partner. It is found that domestic growth may be either negatively affected or unaffected by a domestic import tariff, while it is always positively impacted by foreign growth. Furthermore, convergence in growth rate can emerge both with an import tariff and under free trade. Ours results are consistent with the empirical evidence.

Social rents, interest rates, and growth

Abstract We present a simple OLG model with a convex technology in which physical capital exhibits a productive externality, and workers receive part of the social rents generated by that externality. This setup allows for sustained growth without incurring poverty traps. Moreover, every equilibrium path displays constant interest rates as suggested by some empirical evidence.

An infinite dimensional extension of the theory of decentralized mechanisms

Abstract The purpose of this paper is to show that the general mathematical theory of decentralized resource allocation processes can be extended to infinite dimensional spaces. We extend a topological result due to Hurwicz and we also offer an economic example as an application of the general theory. This example extends some previous results to the case with infinitely many commodities.

The International Trade as the Sole Engine of Growth for an Economy

Can international trade act as the sole engine of growth for an economy? If yes, what are the mechanisms through which trade operates in transmitting permanent growth? This paper answers these questions with two simple two-country models, in which only one country enjoys sustained growth in autarky. The models differ in the assumptions on technical change, which is either labour- or capital-augmenting. In both cases, the stagnant economy imports growth by trading. In the first model, growth is transmitted because of permanent increases in the trade volume. In the alternative framework, the stagnant economy imports sustained growth because its terms of trade permanently improve.

A decentralized and informationally efficient mechanism realizing fair outcomes in economies with public goods

We present a decentralized mechanism (called Lindahl Egalitarian), which yields Pareto efficient and envy free allocations (i.e. fair outcomes). We show that the mechanism is informationally efficient in general production economies with an arbitrary, but finite, number of private and public goods, and a finite number of agents. The mechanism reduces to the Walrasian mechanism starting from equal wealth when no agent cares about public goods. We also prove that the set of Public Competitive equilibrium allocations (from equal endowments and proportional taxation), and the set of the Lindahl Egalitarian equilibrium allocations are the same.